Its December 2016. Christmasis drawingnear.Britain is buzzing. A country thathad been shaken to the core by the Credit Crunch is amongthe most successful and confident nations on the planet.
Low commodity prices mean that petrol has fallen to 90p a litre, and electricity and gas prices arecheaper too.Tumbling energy and transport costs have kept inflation close to zero all year long.
The momentum in the economy has been building, as the employment rate has pushed to 75%. The most common complaint is that you cant get a plumber or an electrician for love nor money. A transport system thats fit to burst leads to calls to boost the UKs creaking infrastructure. The economy isnt just recovering, its booming.
Pay rises have beenabove inflation. However, the consensus has been that theres still no need to increase interest rates from the current 0.5%. The main debate has been whether interest rates should be raised not because of inflationary pressure, but quite simply to cool the boom. Theres talk in political and business circles of Britain reaching near-full employment.
Stock markets, after the battering of recent years, have started recovering. The FTSE100 has been climbing slowly, reaching a highly respectable 6,600 at year-end. Beaten-upblue chipshave been pushing ahead. However, the realstars have been emerging markets, with China bouncing by 20%, and India by 15%.
In contrast, the US seems stuck ina malaise, withthe stock market producing disappointing returns, and an employment rate stuck far below that of Britain. The mantle of worlds greatest nation seems already to be moving to China. The spectre of long-term unemployment and a lost generation of American youth moves centre stage in the US presidential election. Is it a case of managing Americas decline, or can its fortunes be revived?
Across the USand Europe, populism is a force fuelled by the many dispossessed and disenfranchised. The popularity of figures such as Donald Trump and Marine Le Pen remains high.
Europe, surprisingly, is gradually recovering, helped by a transfusion of QE and a weak euro. Particular bright spots include Ireland, Spain and Germany. Stock markets also recover. However, the European question doesnt go away, made worse by a global refugee crisis with its epicentre in the Middle East. Is it really feasible to have a Europe with free borders, which allows the free movement of labour? An EU referendum in Britain brings these issues into sharp, perhaps painful focus. People know that leaving theEU would be the most seismic event in the Unions history.
But the icing on the cake for Britain is more sporting success, from the Olympics, F1 and cycling, toFrance 2016. Its a positive, happier, sunnier world. A world less likely to bawl, shout and fight, and more likely to sit back, smile and laugh.
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